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BREAKING NEWS & VIEWS

Analyst: Mag Industry to Lose 35% of Value by 2014
Tuesday, January 26, 2010
Steve Smith

Calling it “Magazine Publishing’s Great Realignment,” MediaIdeas’ analyst David Renard says that before this dark age is over for the periodical industry, we will have witnessed a loss of 35% of its value, or $16 billion, between 2007 and 2014. Economic instability is only one source of the periodical world’s woes. The relentless adoption of digital formats is a major contributor to the depression, as is the inherent inefficiencies of physical media (circulation, printing, distribution and auditing). For the 2007-2014 period, the magazine industry will see compound annual growth rates of -6%. In 2007 the magazine economy was valued at $47 billion, but by 2014 it will be worth $30 billion.

The rebound, which will be slow and modest, Renard predicts, won’t start until 2015, when a more favorable, mature market for e-readers will give these players a viable digital platform. In an earlier report, MediaIdeas previously argued that the e-reader market would accelerate in the middle of the next decade because of decreased pricing and improved graphical capabilities. Periodicals are "in the midst of a Great Realignment where expectations of when, how, and in what format magazine content is delivered are consistently mutating," says Renard. "The periodical industry will recover later this decade from its ongoing decline as a smaller, yet more efficient and effective marketplace for the distribution, primarily, of digital paginated content.”

After five years of magazine recovery, 2014 to 2020, the value of the sector will climb to about $35 billion, up 11% overall at a CAGR of 2.5%. “The demand for digital paginated content will help to mitigate the ongoing effect of the declining market for printed periodicals,” Renard writes in the report. Still, the $35 billion that magazines will realize in 2020 will be considerably less than the $47 billion valuation the industry enjoyed in 2007. Between 2008 and 2020, the magazine industry will have lost about $10 billion in value, MediaIdeas argues.

If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com

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COMMENTS

What a load of crap this is. Who is this guy and where did he get his crystal ball? I could see digital taking over need for magazine but how he can predict it coming back after 2014? Get real. How does this hurt Mag? They can sell their wood regardless of a decline of magazines. Look in your mailbox, get any flyers lately?

Posted by yaok on Tuesday, January 26, 2010 @ 08:42 AM

It's hard to take seriously any kind of estimate about where the industry will be by 2014, not to mention 2020. With the speed at which things are changing, we don't know where the industry will be next year, not to mention five or ten years from now.

Posted by jasch on Tuesday, January 26, 2010 @ 02:11 PM

Since the industry appears to be a state of freefall, it'll be interesting to see which old line publishers will be left standing at the end of 2014. Can the old guard reduce overhead expenses fast enough to make it through the continued downturn in revenues?

Posted by Tom on Tuesday, February 2, 2010 @ 04:50 PM

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